Electric Entertainment Announces Financing Deal

Los Angeles-based production and distribution company Electric Entertainment has announced the closing of a $100 million loan credit facility with Bank of America.

The five-year agreement will be initially used for the expansion of Electric’s production slate that includes “Leverage: Redemption,” “The Ark” and “Almost Paradise,” among other programs.

“This facility is our largest to date, exemplifying Bank of America’s recognition of Electric’s continuous growth,” Jeff Gonzalez, CFO of Electric Entertainment, said in a statement. “The credit agreement allows us to continue on our quickly moving trajectory.”

“With the advent and continuation of the streaming industry’s growth, we have been lucky to continue to do what we do best — create original scripted programs that audiences love,” Dean Devlin, CEO of Electric Entertainment, said in a statement. “With not only our broadcast, but now our streaming channel and platform partners, our content is in higher demand as our distribution expansion has become far-reaching.”

In the past year, the company produced three TV series — all streaming platform and broadcast originals. Electric is currently wrapping up production on its  second season of “Leverage: Redemption,” the spin-off continuation of “Leverage,” one of Amazon Freevee’s first original programs. “Almost Paradise,” which originally aired on WGNA, has been greenlighted for a second season for Freevee and is currently in production.  In addition, Electric’s new series “The Ark” just wrapped and will air as a SYFY Channel original.

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“Bank of America was pleased to work closely with Dean and the Electric Entertainment management team to help them chart their future growth,” Randy Hua, head of the Entertainment Industries Group at Bank of America, said in a statement. “Electric has a strong pipeline of creative broadcast and streaming projects and can continue to increase their influence through diverse channels.”

Electric also has its own app ElectricNow, a premium OTT linear channel and app containing programs produced and acquired by the company. It can be found on the Roku Channel, Plex, STIRR, Local Now, Sling TV, Tivo Plus, Freevee, XUMO and Samsung.

Analysts Bullish on Disney, Citing Content Spend, Streaming Sub Growth

Netflix is ending 2021 the way it started the year: No. 1 across all industry metrics. But Disney, spurred by a strong content pipeline and burgeoning subscription streaming video service (Disney+), is rapidly bridging the divide, according to Bank of America analyst Jessica Reif Ehrlich.

In a new note, Ehrlich contends Disney will end 2021 (and Disney’s fiscal first quarter) on a bullish run, adding seven million Disney+ subs. That’s a bold projection considering the service added just 2 million subs in Q4.

Driving that sub growth is consumer interest in new original series such as “The Beatles: Get Back,” “Hawkeye” and “The Book of Boba Fett,” among others. More importantly, Reif Ehrlich contends Disney’s underperforming December box office could lead the company to “re-evaluate” its theatrical distribution strategy.

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Indeed, Disney currently fields just two titles in the top 20 releases in the month, with animated musical Encanto generating $45.2 million in ticket sales since its Thanksgiving debut, and superhero movie Eternals adding $11 million.

Reif Ehrlich said she wouldn’t be surprised to see Disney push content output beyond its traditional brands, such as Marvel, Star Wars, Pixar and Disney, to broaden the service’s reach and appeal.

In his last Wall Street confab appearance for 2021, Disney CEO Bob Chapek said he remained committed to a strategy releasing movies based on current market conditions and streaming — including limiting theatrical releases to 45 days and distributing more titles exclusively on Premier Access and Disney+.

“We will always do what we believe is in the best interest of the film and the best interests of our constituents,” Chapek said.

That’s music to the ears of Reif Ehrlich and KeyBanc analyst Brandon Nispel, who both believe Disney shares are undervalued from 30% to 40%.

“At current levels, investors significantly under-appreciate Disney’s growth potential,” Nispel wrote in a Dec. 13 note.

That logic could apply to Netflix, Amazon and WarnerMedia, according to Wells Fargo analyst Steven Cahall, who believes the trio, along with Disney, control 80% of the streaming video market.

“The last few years have seen the ubiquitous launch of the ‘+,’ and more recently, we think investors have grown far more suspect whether streaming can create value,” Cahall wrote. “Pretty much every media company is now a streaming company, too. But should they be?”